Crisis Resolution, Policies, and Institutions: Empirical Evidence

Claessens, Stijn; Klingebiel, Daniela; Laeven, Luc

doi:10.1017/cbo9780511528521.007

Cited by 59 publications

(81 citation statements)

References 187 publications

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“…The December 2012 European Council Conclusions _____________________________________________________________________________________________ Policy Department A: Economic and Scientific Policy state that its authority should be extended to all non-euro area countries participating in the SSM, but how this is articulated with the fact that the ESM currently does not cover those countries remains to be debated 18 . As for which banks should be subject to the SRM's authority among those headquartered within its geographical perimeter, there are three broad possible options: (a) only those banks with significant cross-border presence or systemic significance at European level; (b) all banks directly supervised by the SSM; or (c) all banks, including smaller ones that escape direct SSM supervision.…”

Section: ____________________________________________________________mentioning

confidence: 99%

“…Thus, we feel that the EU as well as individual Member States should refrain from introducing significant new legislation in this area until the completion of Step 3 and the establishment of the SRM. 18 In any case, it appears logical to assume that the SRM will not have authority beyond the geographical scope of the SSM.…”

Section: Banking Structurementioning

confidence: 99%

“…The Commission's "crisis communications" are rooted in its rescue and restructuring (R&R) guidelines 20 , introduced in 2004 and applied to all sectors. However, the R&R guidelines proved in some aspects to be inadequate for the financial sector, as they were not designed to take into account a systemic crisis and a persistent threat to financial stability.…”

Section: Summary Of the European Commission's State Aid Rules For Thementioning

confidence: 99%

“…Closing down a single bank might even benefit the rest of the industry, especially if the reason for failure was aggressive risk pricing und thus undermining other banks' margins. 5 But this is a point of view that is rarely taken into account in practice. Moreover, bank failures are rare during tranquil times, but then bunch together when a crisis erupts.…”

Section: Tranquil Versus Turbulent Timesmentioning

confidence: 99%

“…4 which envisaged the establishment of a SRM in addition to the adoption of the Commission's proposals for a Single Supervisory Mechanism 5 and new rules on Recovery and Resolution 6 as well as on Deposit Guarantee Schemes. 7 The European Council Conclusions underline the need for a SRM in the following way:…”

Section: Introductionmentioning

confidence: 99%

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The Single Resolution Mechanism

Baglioni

2016

The European Banking Union

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A Single Resolution Mechanism (SRM) is one of the main pillars of the Banking Union project. The notes in this compilation examine options for a possible future design of a SRM in more detail and put this mechanism into a broader context. IP/A/ECON/NT LINGUISTIC VERSIONS Original: EN ABOUT THE EDITORTo contact the Policy Department or to subscribe to its monthly newsletter please write to: poldep-economy-science@ep.europa.euManuscript completed in March 2013. Brussels, © European Union, 2013.This document is available on the internet at: http://www.europarl.europa.eu/studies DISCLAIMERThe opinions expressed in this document are the sole responsibility of the authors and do not necessarily represent the official position of the European Parliament.Reproduction and translation for non-commercial purposes are authorised, provided the source is acknowledged and the publisher is given prior notice and sent a copy. The three notes in this compilation describe various options for a Single Resolution Mechanism (SRM) in more detail and put the mechanism into a broader context. http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/en/ec/134353.pdf. ______________________________________________________________________________________________ 5The Commission proposals for a single supervisory mechanism can be found on the following webpage: http://ec.europa.eu/internal_market/finances/banking-union/index_en.htm. NOTE AbstractThe European Council has outlined the creation of a Single Resolution Mechanism (SRM) complementing the Single Supervisory Mechanism. The thinking on the legal basis, design and missions of the SRM is still at an early stage and depends on important other initiatives, including the European Stability Mechanism's involvement in direct bank recapitalisations and the Bank Recovery and Resolution (BRR) Directive. The SRM should also not be seen as the final step creating Europe's future banking union.Both the BRR Directive and the SRM should be designed to enable substantial financial participation of existing creditors in future bank restructurings. To be effective, the SRM should empower a central body. However, in the absence of Treaty change and of further fiscal integration, SRM decisions will need to be implemented through national resolution regimes. The central body of the SRM should be either the European Commission, or a new authority.This legislative effort should not be taken as an excuse to delay decisive action on the management and resolution of the current European banking fragility, which imposes a major drag on Europe's growth and employment. . We also identify an implicit fourth step of completing a sustainable banking union, which unlike the first three will require treaty changes and deeper fiscal and political integration, and may include a European insolvency regime, a European resolution regime, and a more integrated fiscal and deposit insurance framework supported by enhanced democratic accountability.Implementing this sequence will involve a complex balancing of...

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Section: ____________________________________________________________mentioning

confidence: 99%

Section: Banking Structurementioning

confidence: 99%

Section: Summary Of the European Commission's State Aid Rules For Thementioning

confidence: 99%

Section: Tranquil Versus Turbulent Timesmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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The Single Resolution Mechanism

Baglioni

2016

The European Banking Union

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The Role of Banks in Promoting Post-disaster Economic Growth

Duqi

2023

Palgrave Studies in Impact Finance

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Financial soundness indicators and financial crisis episodes

Kasselaki¹,

Tagkalakis²

2013

Ann Finance

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This paper studies the links between financial soundness indicators and financial crisis episodes controlling for several macroeconomic and fiscal variables in 20 OECD countries. We focus our attention on aggregate capital adequacy, asset quality and bank profitability indicators compiled by the IMF. Our key findings suggest that, in times of severe financial crisis, regulatory capital to risk weighted assets increases (by about 0.5-0.6 percentage points-p.p.) to abide by regulatory and supervisory demands, non performing loans (NPL) to total loans increase dramatically (by about 0.5-0.6 p.p.), but loan loss provisions lag behind NPLs (they fall by about 12.3-18.8 p.p.) and profitability deteriorates dramatically (returns on assets (equity) fall by about 0.3-0.4 (5.0-7.0) p.p.).

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Crisis Resolution, Policies, and Institutions: Empirical Evidence

Cited by 59 publications

References 187 publications

The Single Resolution Mechanism

The Single Resolution Mechanism

The Role of Banks in Promoting Post-disaster Economic Growth

Financial soundness indicators and financial crisis episodes

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